A Progressive Tax

question 82

Multiple Choice

A progressive tax

• A) is one that taxes those with higher incomes at a higher rate than those with lower incomes.
• B) takes a similar percentage in the form of taxes from those with higher incomes as it does from those with lower incomes.
• C) takes a higher percentage of income in the form of taxes from those with lower incomes than from those with higher incomes.
• D) is any tax in which the dollar amount of taxes paid increases with income.

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Definitions:

Returns to Scale

A concept in economics that describes how the increase in inputs affects the level of output of a production process.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with costs per unit of output generally decreasing with increasing scale.

Diseconomies of Scale

A situation in which a business's costs per unit increase as the scale of operation expands, opposite to economies of scale.

Average Total Cost

The total cost of production divided by the quantity of output produced, representing the cost per unit of output.